Trading in the stock market looks like an amazing way to grow your money, but it is
something serious not a game of luck, you should not rely on luck only. It requires a
good plan and a calm attitude. If you are beginners and want to start it, you will get
confuse because there is a lot of information like chart and news. But this is normal.
Here are some of the best practices you can follow.

Start with a Solid Trading Plan

The biggest mistake beginners made is buying stock randomly or jumping in trading
without making any plan. You should make plan that include three things:

Your Goals: Do you want to make quick profits or long-term growth like saving it for long
time?

Your Risk: Decide how much money you are willing to lose How much money are you
willing to lose on one trade. A safe rule is to risk no more than 1-2% of your total money.

Your Strategy: Know the conditions that when you will buy the stock and when you will
sell it.

If you write a proper plan about this, you will stay calm and away from making emotional
choices.

Prioritize Risk Management

This is the golden rule of trading: protect your money. Do not lose your cash all at once.
You cannot trade or make money anymore if you lose your all cash. The best tool for this
is a Stop-Loss order. If prices fall very much then this a tool that automatically sell
stock. It is like a safety net that ensures one bad trade does not ruin your money.

Think of Trading as a Business

Serious traders treat trading like a business, they work hard to be at it. They do not treat
it like a hobby. Always keep your records like a trading journal. Every time when you buy
or sell something, write it in your diary or journal. Note:

• When you buy stock.
• The price in which you buy a stock and the price in which you sell your stock.
• What was your feeling at that time?
• What mistakes you made and where?

Keep Your Emotions in Check

There are two feelings that act like a worst enemy in trading: one is greed, when you
want too much. Second is fear, when you become very scared.

• When you are in greed you wait too long to sell your winning stock thinking that it
  will go up forever. But then prices goes down suddenly and you loss all your
  profit.
• Fear can cause making wrong decisions like you sell your stock too early due to
  fear but it was a good stock that might rise up in future. Fear stops you from
  buying good stock.

Trust your trading plan. If the plan says “sell at that profit”, then sell it. Do not let your
feeling change your mind.

Start Small and Practice

You wouldn’t run a marathon without training first. The same applies to trading. First use
a Paper Trading account to practice. There are a lot of platforms or app that offer this
trading with fake money, but the prices there are real. This will help you very much in
learning many thing and practicing how things work. After that when you are ready to
invest real money, use a very small amount, amount that can afford losing.

Never Stop Learning

The stock market changes every time. The strategy that work last year might not work
this year. In order to learn new things, you should:

• Dedicate time to reading books about trading.
• Follow the news about prices and stocks and companies that are trusted.
• Learn from the people that are experienced traders and have been doing trading
  for a long time.

Do not try to know about everything like every company, just focus on few companies
and learn about them very well. For example: if you understand technology companies,
then focus on them. This is called Trading what you know. With this you can make
better choices